Over the past decade, millions of square feet of manufacturing and distribution space have been rendered obsolete as technology advances allow for smaller footprints. The first to face the challenge is the local government and then the Owner. For the owner it’s a balance sheet problem, for the City, it’s a jobs and economic problem.
Consequently, there is growing need for creative marketing asset repositioning. Once the offering is set, then the need shifts to a focus on a timely and deliberate action. A sale, a rezoning, a lease up or a redevelopment.
An example is Intel’s decision to sell several surplus chip manufacturing plants. In one case, they had about 500,000 square feet of space down south. The closing would cost the city millions. Intel used, for the first time, a real estate auction program, which attracted users and re-developers throughout North America. 30 interested prospects were provided to the decision maker, and 10 were chosen for strong consideration. With cash offers in hand, the board was consulted and they were able to make a decision based on real information and competition, resulting in a sale in only 10 weeks.
When do governments and corporations turn to structured services;
1. If time and price are equally important, then the structured sale strategy can be more effective than conventional strategies.
2. When it’s important to attract many buyers all at one time. This allows the decision makers to rely on more than one offer or one type of buyer.
3. When a timing goal must be met. Corporate decisions to vacate major facilities and thousands of jobs affect the economy on local and regional levels. Consequently, local and state legislation creates pressure on owners to sell facilities quickly, thereby re-establishing the job market and tax opportunities.
4. When the cost of carrying a vacant property, or under utilized property is most is excessive; in real dollars, or in lost opportunity.
5. When it makes sense to outsource to experts in the field. Corporations and governmental owners can use outsourced real estate experts without incurring new staff.